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John Spiers gives EQ Investors staff chance to take control

John Spiers gives EQ Investors staff chance to take control

Staff at John Spiers’ EQ Investors will be given the opportunity to acquire majority control of the company in a new employee share scheme, which will also see Spiers transfer his shares to the EQ Foundation.

Back when Spiers (pictured) first bought the financial planning arm of Truestone and relaunched it as EQ Investors in October 2014, he had revealed plans to release up to 45% of the equity to staff. The company has now revised that upwards, to more than 50%.

In results for the year to 30 April the business noted that ‘additional recruitment’ had been required over the period as its client base and assets under management rose sharply. A ‘significant loss of clients’ through the ‘loss of key staff’ was one of the company’s core business risks, which it hoped to manage ‘by an alignment of interest between key employees and shareholders’.  

The company said that the details of the new scheme were shared with staff last month and are due to be implemented in May.

The EQ Foundation, which Spiers will eventually transfer his shares to, is a charitable organisation which receives funding from the business other related parties. It makes a number of multi-year grants to several institutions, including the Big Give and The African Prisons Project.

The changes come at a time when the company expects to move back into the black in its new financial year, following years of losses.

A spokesperson said: ‘We expect operating losses, excluding the goodwill write-off, to fall sharply in the current financial year and to achieve a profit in 2018/19.’

According to results filed at Companies House for the year to 30 April 2017, EQ Investors recorded a loss of £2.6 million, down from £2.7 million in 2016.

The loss was attributed to recruitment costs as well as an exceptional charge of £1.29 million for amortising the goodwill on the balance sheet. Over the period there were three net additions to staff. The average monthly number of employees was 52, with a total cost of £4.2 million.

In October, the company also hired the former chief executive of Broadstone Corporate Benefits, Mark Howlett, as an executive director responsible for the advice side of
the business.

The company added that the additional recruitment was necessary to manage the rise in assets from £420 million to £600 million. The AUM increase also contributed to a 19% increase in turnover to £5.7 million.

Administrative expenses were £6.4 million, up 7.6% compared to 2016.

 

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